First, take year-end tax planning seriously! Every
business owner and taxpayer should get with their tax preparer and evaluate the
effect of these higher taxes on their business.
We will discuss this in more detail from now until the end of the year.
Second, understand that these tax increases
are hurting the economy now, and will hurt the economy even worse in 2013!
tax increases will not go into effect until 2013, they are having a negative
effect on the economy now. Business
owners and investors need to know how much they can expect to pay in taxes in
the future in order to make equipment buying and employee hiring decisions now. When faced with uncertainty, they decide to
do nothing, and instead wait for the election to be over and the politicians to
finalize the rules. This means that
hiring and investment is stuck in neutral until the President and Congress act.
Higher taxes are not the only drag on the
economy! When these tax increases are added to
increasing gas prices and the inevitable increasing inflation caused by the
Federal Reserve’s third wave of printing money (increasing the money supply
under QE3), the disposable income of both families and small businesses will be
Third, and most importantly, during the last
three months of this year, every small business owner must prepare their
business for the coming storm! If all three items we discussed above are
allowed to happen at the same time, the 2013 economy has the potential to be
worse than what we experienced in 2007 and 2008.
That means only the strongest of companies
will survive! So in the next three months you should:
all unnecessary expenses.
hire any employees you don’t absolutely need.
jobs that can be outsourced.
all business systems so that work can be accomplished with a minimal number of
- Pay off
your debts as much as possible.
relations with a local bank. Obtain a
line of credit as a safety net.
and speed up all aspects of your sales cycle.
and speed up your receivables collection.
and control your inventory.
the loyalty of your customers. Watch the
interview we have in this article with Jim Palmer on using newsletters to
more to your current customers. See the
article in our August issue on this.
- Look for
ways to sell new products or services to your current customers.
and implement ways to have recurring revenue.
- Get a
line of credit in place now. See our
interview with Ray Aguilar on how to get an SBA loan in our August issue.
Don’t let this warning discourage you.
As always, the strong and prepared survive and prosper.
But hang on tight—it’s going to be a heck of a ride.